Eltel finalized the divestment of High Voltage Poland

Eltel announced this morning that it had finalized the divestiture of the High Voltage business in Poland to Mutares SE & Co. KGaA yesterday evening, following receipt of customary regulatory approval. Hence, Eltel has now fully discontinued its business area High Voltage in Poland.

The company had previously communicated that the total value of the transaction for Eltel, including Mutares’ replacement of Eltel guarantees for the business, is about 25 MEUR. The transaction is also estimated to have a negative cash flow effect of 3.8 MEUR and have a net negative result of around 23.5 MEUR on group EBIT, which Eltel booked already in Q1. Furthermore, it also expected the deal to go through during Q2’24.

Given the background, we had already included the divestment in our estimates and expected the deal to go through during June 2024. Therefore, the finalization of the deal has no effect on our estimates or recommendation of the company. As said, in our recently published initiation of coverage report, we think that the divestment of the historically loss-making business was a very sensible decision, and we expect the move to support Eltel’s profitability improvement. The initiation of coverage, where we have taken a more extensive look at the company, can be read here.